Exhibit 10.15
Type: EX - 10.15 Employment Agreement by and between Electronics Boutique
Holdings Corp. and Xxxxxx X. Xxxxxx
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 5th day of December, 2000 between ELECTRONICS
BOUTIQUE HOLDINGS CORP., a Delaware corporation (the "Company"), and XXXXXX X.
XXXXXX (the "Executive").
WHEREAS, the Executive will be employed by the Company on January 3, 2001;
and
WHEREAS, the Company and Executive mutually desire to enter into this
Agreement with respect to Executive's employment with the Company on the terms
set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Company and Executive agree as follows:
1. EMPLOYMENT AND TERM. The Company agrees to continue to employ Executive
and Executive agrees to continue to serve the Company as its Senior Vice
President of Store Operations or in such other executive positions as may be
mutually agreed upon by Executive and the Company, during the Term (as defined
below). The term of this Agreement (the "Term") shall commence on January 1,
2001, and end on the date which is the third year anniversary thereof, or such
later date to which Executive's employment may be extended as provided in
Section 12 hereof.
2. DUTIES. During the Term, Executive agrees to serve the Company
faithfully and to the best of his ability; to devote his entire working time,
energy and skill (except for illness or incapacity and except for vacation time
as provided herein) to such employment; to use his best efforts, skills and
ability to promote its interests and to perform such duties as from time to time
may be assigned to him, subject to Section 3 hereof. Notwithstanding the
foregoing, Executive may engage in charitable and public and industry service
activities so long as such activities do not materially interfere with the
performance of his duties and responsibilities under this Agreement.
3. RESPONSIBILITIES. Executive's area of responsibility shall be that of
Senior Vice President of Store Operations, or such other executive position as
may be mutually agreed upon by Executive and the Company, and during the Term,
the Company shall not assign any duties to or remove any duties from Executive
inconsistent therewith and, further, the Company shall at all times provide
Executive with such executive powers and authority as shall reasonably be
required to enable him to discharge such duties in an efficient manner, together
with such facilities and services as are suitable or customary to such position.
During the Term, Executive shall report directly to the Chief Executive Officer
of the Company or his designee.
4. COMPENSATION. The Company agrees to pay Executive as compensation for
all duties performed by him in any capacity during the period of his employment
under this Agreement:
(a) base salary ("Base Salary"), payable in accordance with the
Company's normal payroll practices, at the annual rate of $250,000, subject to
such adjustments as the Board of Directors or a committee thereof shall approve.
(b) a bonus (the "Bonus") payable in cash, determined pursuant to a
bonus program adopted by the Board of Directors that will have a target amount
of 50% of Base Salary with objectives to be established in the approved program.
(c) from time to time, Executive shall also be eligible to
participate prospectively in the Equity Participation Plan of the Company, in
the amounts determined by the Board of Directors committee which administers
the Equity Participation Plan. On January 3, 2001 Executive will receive an
initial grant of options for 60,000 shares, which vest equally over three years.
5. BENEFITS; REIMBURSEMENT OF EXPENSES; VACATION. Executive shall also be
entitled to:
(a) participate in all of the benefit programs which are presently
or may hereafter be provided by the Company including, without limitation, all
stock option, pension, thrift, incentive, deferred compensation, retirement,
health insurance and life insurance programs (collectively, the "benefit
programs"), which includes specifically (i) the policies of "key man" insurance,
if any, on Executive's life, payable at $1 million to each of the Company and
the Executive, and (ii) the deferred compensation plan presently existing
between the Company and the Executive;
(b) reimbursement for relocation expenses as outlined in the
Relocation Policy for Homeowners provided the appropriate relocation agreements
are signed by Executive;
(c) reimbursement by the Company of all expenses reasonably incurred
by him in connection with the performance of his duties including, without
limitation, travel and entertainment expenses reasonably related to the business
or interests of the Company, upon submission by him of written documentation of
such expenses;
(d) a vacation of four (4) weeks each year at such time or times as
he shall reasonably determine; and
(e) have the Company pay the reasonable costs and expenses of a
leased automobile for Executive, commensurate with an automobile for a person
with Executive's position, including the reasonable expense of maintaining the
automobile for business and personal use, in accordance with Company policy.
6. DISABILITY OR DEATH.
(a) If, during the Term of this Agreement, Executive becomes
disabled or incapacitated as determined under the Company's Long Term Disability
Policy ("Permanently Disabled"), the Company shall have the right at any time
thereafter, so long as Executive is then still Permanently Disabled, to
terminate this Agreement. If the Company elects to terminate this Agreement by
reason of Executive becoming Permanently Disabled, the Company, for the
unexpired Term of this Agreement, shall (whether or not such benefits are
covered under the Company's Long Term Disability Policy), continue to pay:
(i) to Executive, sixty percent (60%) of his Base Salary
(through insurance or otherwise) at the rate in effect on the date of such
termination, such payments to be made as set forth in Section 4;
(ii) in the event of Executive's death after such termination
for Permanent Disability, then to the persons and in the manner set forth in
subparagraph (c) of this Section 6, an amount per annum equal to sixty percent
(60%) of Executive's Base Salary at the rate in effect on the date this
Agreement is terminated by the Company, such payments to be made as set forth in
Section 4; or
(iii) if, and so long as, the Company does not elect to
terminate this Agreement as a result of Executive's Permanent Disability, this
Agreement shall continue in full force and effect and Executive shall be
entitled to all benefits including compensation as set forth herein.
(b) If Executive dies during the Term, this Agreement shall
automatically terminate, and the Company shall pay to the persons set forth in
Subparagraph (c) of this Section 6, all accrued but unpaid salary, bonus
(calculated for the then current year prorated up to the date of death),
benefits and other amounts, as required by law.
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(c) Any payments to be made pursuant to subparagraph (a) or (b) of
this Section 6 to persons other than Executive in the event of the death of
Executive shall be made to Executive's designated beneficiaries or, if no such
designation has been made and Executive's spouse survives Executive, then the
payments shall be made to Executive's spouse, and if such spouse subsequently
dies before all such payments are made, the remaining payments shall be made to
the estate of Executive's spouse. If Executive is not survived by a spouse, then
the payments shall be made among Executive's issue who survive Executive, PER
STIRPES, and if any individual who is issue of Executive and who as of the date
of death of Executive is entitled to receive payments dies after Executive's
death, the payments which such issue would have been entitled to receive shall
be made to his or her estate. If at the date of Executive's death Executive is
not survived by any spouse, or any issue, then the payments shall be made to
Executive's estate.
7. CONFIDENTIAL INFORMATION; CONFLICT OF INTEREST; NON-COMPETE.
(a) Without the express prior written consent of the Board of
Directors, Executive shall not disclose or make available to anyone outside the
Company, its subsidiaries or affiliated corporations or entities any
confidential or proprietary information of, or concerning, the Company,
including, without limitation, trade secrets, knowhow, customer lists,
inventions or other information not generally known or reasonably available to
any competitor of the Company, its subsidiaries or affiliated corporations or
entities.
(b) In consideration of the compensation, grant of stock options and
other benefits payable to Executive hereunder, Executive agrees that he shall
not, without the prior written consent of the Company, engage in a "Prohibited
Business" (as defined herein) during the Term and for a three-year period
following the Term (the "Non-Compete"). For this purpose, the term "Prohibited
Business" shall mean the development, distribution, or retail sale of video
games, personal computer gaming or similar entertainment software and devices,
personal computers and related devices that facilitate or enhances the use of
gaming and similar entertainment equipment, devices, programs and software for
game systems or personal computers provided such business does or is intended to
amount to more than an insubstantial part of the annual revenue of the entity
engaged in such business. Executive shall be regarded as engaged in a Prohibited
Business if he engages as partner, owner, agent, representative, executive,
officer, director, employee or consultant, or participates directly or
indirectly, whether through investment, partnership, license, joint venture or
otherwise, in any Prohibited Business. Nothing set forth above shall be deemed
to prevent the Executive from merely acquiring or owning for investment purposes
only five percent or less of any entity, whether public or private, regardless
of the business in which such entity is engaged, except to the extent such
ownership violates any Federal or state law, rule or regulation governing the
issuance, purchase, or sale of securities. No such acquisition or ownership
shall be made during the Term by Executive to the extent such ownership exceeds
the percentage ownership Executive has in the Company.
(c) Executive shall not, directly or indirectly, engage in any or
have an interest, financial or otherwise, in any other business enterprise which
interferes or is likely to interfere with Executive's independent exercise of
judgment in the Company's best interests. Executive will not undertake
involvement in any outside business interest without first assuring that no
conflict of interest exists and obtaining prior written approval of the Board of
Directors of the Company to undertake the contemplated involvement. Executive
acknowledges that he has a continuing responsibility for insuring that no
outside business interest in which Executive presently is involved or in the
future may be involved is detrimental to the interests of the Company.
(d) Upon the termination of this Agreement (including any renewal
term) or earlier as provided herein, Executive shall be permitted to act as a
consultant to any entity as to any business or investment other than a
Prohibited Business.
8. TERMINATION. In addition to the provisions of Section 1 hereof, this
Agreement may be terminated prior to the expiration of its Term as follows:
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(a) Automatically upon Executive's death, in which event the
provisions of Section 6 shall be applicable;
(b) Upon notice from the Company upon Executive's Permanent
Disability, in the event the Company elects to terminate Executive's employment
pursuant to the provisions of Section 6;
(c) Upon thirty (30) days' prior written notice from the Company for
"cause," which for purposes hereof shall mean that (i) Executive has been found
guilty of committing any felony, or (ii) in the reasonable judgment of the
Board, Executive has been negligent or has committed willful misconduct in
carrying out his duties hereunder (unless Executive cures such breach, or has
taken substantial and continuing actions to cure such breach, within such thirty
(30) day notice period);
(d) Upon thirty (30) days notice from Executive upon the Company's
breach of any material provision of this Agreement (unless the Company cures
such breach within the thirty (30) notice period). Without limiting the
generality of the foregoing, it is acknowledged and agreed that Sections 2, 3,
4, 5 and 8 of this Agreement are material provisions of this Agreement; or
(e) Upon notice from Executive following a "change in control".
"Change in Control" shall mean a change in ownership or control of the Company
effected through either of the following transactions.
i. any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding, securities through a transaction
which the Board does not recommend or approve or through a negotiated sale of
securities to any person or persons who is considered hostile; or
ii. there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months (or less) such that a majority of
the Board members (rounded up to the nearest whole number) ceases, by reason of
one or more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.
9. WRONGFUL TERMINATION; COMPANY BREACH; CHANGE IN CONTROL. In the event
of the termination of this Agreement by Executive pursuant to paragraph (d) or
(e) of Section 8, or in the event of termination of this Agreement by the
Company other than pursuant a notice of termination under paragraph (b) or (c)
of Section 8, Executive shall be entitled to receive all of the compensation and
benefits provided herein until the later of (i) the date the Term would have
expired absent any termination of this Agreement, or (ii) twelve (12) months
from the effective date of such termination. In no event will an amount be
payable to Executive in excess of $100 less than the maximum amount of
compensation deductible to the Company under Section 280G of the Internal
Revenue Code of 1986, as amended. If the Company and Executive shall become
involved in a dispute relating to any alleged breach of this Agreement by the
Company or Executive, the dispute shall be submitted to binding arbitration by
the AAA (American Arbitration Association) in Philadelphia, Pennsylvania upon
the demand of either party, the results of which may be transferred to a court
of competent jurisdiction and entered of record as a judgment upon which
execution may issue. If Executive substantially prevails (by judgment,
settlement or otherwise) in such dispute, the Company shall reimburse Executive
for all reasonable costs (including reasonable fees and disbursements of
counsel) incurred by him in connection with such dispute upon presentation to
the Company of evidence of such costs. Nothing herein shall prevent either party
from going directly to a court of competent jurisdiction for any form of
injunctive or other equitable relief, whereby the other party shall not have any
right to mandate the arbitration provisions.
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10. CONDITION TO EMPLOYMENT. This Employment Agreement is contingent upon
successful completion of a drug test and background screening and presentation
of documentation on the first day of employment verifying Executive's identity
and authorization to work in the United States. In the event that any of the
foregoing conditions to employment are not satisfied, this Employment Agreement
shall be deemed null and void with no liability to either party hereto.
11. TERMINATION OF PRIOR AGREEMENTS. This Agreement expressly supersedes
all agreements and understandings between the parties regarding the subject
matter hereof.
12. RENEWAL/NON-RENEWAL. This Agreement shall be automatically extended
without further action by the parties for one (1) additional year unless either
party shall, at least 90 days prior to the expiration date have given notice to
the other party that this Agreement shall not be so extended.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereof, their respective legal representatives and to any
successor of the Company, which successor shall be deemed substituted for the
Company under the terms of this Agreement. As used in this Agreement, the term
"successor" shall include any person, firm, corporation or other business entity
which at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of the Company. The Executive
consents to the assignment of this Agreement to any successor who or which
agrees to be bound by all of its provisions without modification adverse to the
Executive.
14. WAIVER OF BREACH. The waiver by the Company of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach.
15. NOTICES. Any notice required or permitted to be given hereunder shall
be sufficient if in writing and if sent by registered or certified mail to
Executive at his residence or to the Company at its principal place of business.
16. ENTIRE AGREEMENT. This document contains the entire agreement of the
parties and may not be changed except in a writing signed by both parties.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania as applied to
contracts executed and performed wholly within the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
ELECTRONICS BOUTIQUE HOLDINGS
CORP.
BY: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
XXXXXX X. XXXXXXXXX
PRESIDENT AND CEO
EXECUTIVE:
BY: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
XXXXXX X. XXXXXX
SENIOR VICE PRESIDENT
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